U.S.-Iran coercive diplomacy produces managed instability

By: Azhar Azam

U.S.–Iran tensions can be read through coercive diplomacy in which escalation functions as a tool to shape negotiations. Throughout the conflict, President Donald Trump applied intense military pressure on Tehran to raise the cost of defiance, followed by diplomatic engagement once leverage was established.

Recent developments suggest this approach has yielded results. By pairing military readiness with threats of destroying Iranian infrastructure, Trump pursued a policy of a managed force intensification to compress Iran’s bargaining position.

The fragile ceasefire already showed that the situation was becoming harder to control. A campaign initially framed as limited to degrading Tehran’s nuclear program risked pulling the wider region into the conflict. Iranian retaliation spread widely across the Persian Gulf, threatening U.S. military bases, striking regional energy infrastructure, and disrupting oil and food supplies – exposing the vulnerabilities of America’s regional partners.

Three dynamics sustained this cycle: widening conflict, mounting economic toll, and growing strain on U.S. alliances.

 

Iran’s horizontal escalation

The scale of Iran's retaliation was the primary driver behind Trump's push for de-escalation.

In response to joint U.S. and Israeli strikes, Tehran adopted a strategy of horizontal expansion, broadening the battlefield by targeting U.S. military installations and civilian infrastructure across Qatar, Bahrain, the United Arab Emirates (UAE), Saudi Arabia, Iraq, and Kuwait.

These strikes exploited a key feature of America’s regional posture. The U.S. maintains a network of forward bases in allied countries to conduct operations in the Middle East. By threatening these facilities, Iran effectively turned the geography of U.S. alliances into a combat zone, placing American partners in harm’s way.

Throughout the crisis, both Washington and Tehran employed coercive signaling – calibrated shows of force and public warnings – to influence each other’s decisions. Trump’s threats and deadlines sought to compel compliance; Tehran’s attacks sent clear counter-signals of retaliation and cost.

Iran was unlikely to prevail in a conventional military confrontation with the United States. Its strategy instead focused on increasing the political, economic, and military costs for Washington and its partners. This in turn increased risks of spillover, including civilian harm, infrastructure damage, and broader regional entanglement.

Mounting economic shock

A second driver behind Trump’s pursuit of de-escalation has been the growing economic shock from the conflict that rippled through energy markets, supply chains, and global food systems.

One of the most sensitive chokepoints is the Strait of Hormuz – the narrow maritime corridor through which roughly one-fifth of global oil supply and a substantial share of seaborne fertilizers pass. The near-shutdown of this strategic waterway disrupted shipping flows and pushed up oil prices, fuel costs, and war-risk insurance premiums.

Iran’s asymmetric retaliation also crossed a line with its Gulf neighbors. After an Israeli strike hit Iran’s South Pars gas field — one of the world’s largest energy hubs — Tehran launched missile and drone attacks on key regional energy hubs.

These strikes inflicted widespread damage to Gulf energy assets such as knocking out 17% of Qatar’s LNG export capacity for three to five years. These attacks demonstrate that Tehran’s response extended beyond direct confrontation with U.S. forces to disproportionately impact regional economies and civilian infrastructure.

Had Gulf leaders not exercised restraint, Iran’s actions could have driven the Middle East to a broader regional war, although these strikes strengthened Tehran’s position by forcing Trump to limit U.S. involvement and bring the conflict to a close.

Beyond energy, the disruption threatened to squeeze the global food system. With about one-third of global seaborne fertilizers traded through the Strait, this could have triggered a food and humanitarian crisis in several regions.

Domestically, rising inflation, eroded consumer purchasing power, and the prospect of slower growth intensified political and economic pressure on Trump. The economic fallout extended to the Gulf, where Arab states have so far incurred up to $194 billion in losses, according to the United Nations Development Program.

Combined, these shocks reveal that coercive strategies generate leverage but also impose economic constraints.

U.S. allies bear the costs

The conflict strained America’s alliance network as well.

Countries hosting U.S. forces — including Qatar, Bahrain, and the UAE — faced direct security threats as missiles and drones traversed the region. For these governments, the danger of “entrapment risk” – the fear of being drawn into the conflict — increased pressure to limit further escalation and reassess the costs of forward deployment.

Tensions also surfaced within the transatlantic coalition. Several European nations hesitated to deploy warships to the Strait, with some denying the U.S. access to airspace or military facilities for operations, reflecting concerns about energy market instability and regional escalation.

At the same time, the White House indicated that the Trump administration could ask Arab countries to pay for the war, potentially shifting part of the burden onto regional partners. Yet as many Gulf states did not support the intervention and urged diplomacy beforehand, the prospect of being asked to absorb the consequences of a conflict they neither initiated nor endorsed would deepen unease among allies.

These dynamics nudged Trump toward capping the conflict.

The strategic gamble

Taken together, U.S.–Iran tensions could be best understood as a recurring system of coercive diplomacy in which force and negotiation acted as interconnected instruments of statecraft. The relationship has repeatedly oscillated between confrontation and limited engagement, without settlement.

Iran’s conventional military limits constrain its ability to compete directly with the United States; it retains leverage to threaten energy infrastructure, maritime security, and broader regional stability. These tools do not enable decisive victory, but they are sufficient to raise the costs of sustained pressure.

The result is managed instability: a system where coercion and engagement repeatedly rise and recede, producing stability through adjustment rather than resolution.

How US betrayed allies by igniting an energy crisis

By: Azhar Azam

Amid the Iran conflict's sharp impact on global energy prices, the Organization of the Petroleum Exporting Countries and its partners (OPEC+) will meet on April 5 with a potential production increase on the agenda.

At a virtual session on March 1, the cartel's eight major oil-producing nations including Saudi Arabia and Russia agreed to raise output by 206,000 barrels per day in April.

This comes as the fallout of the joint US-Israeli attacks on Iran – particularly US "large-scale" bombing targeting facilities around Kharg Island, Iran's economic lifeline that processes 90% of the country's crude exports and handles 950 million barrels a year – has widened into a full‑blown disruption of the global energy system. The White House principal deputy press secretary's statement that the US military could "take out" Kharg Island has raised the risk of further escalation in the region.

The war has already established a de facto blockade in the Strait of Hormuz, the maritime chokepoint through which roughly one-fifth of the world's oil supply and one-third of the global fertilizers used to produce almost half of the world's food pass. As shipping companies reroute vessels and insurers raise risk premiums – global crude prices have surged past $100 per barrel, fueling fears that prolonged instability in this critical corridor would elicit a severe supply shock.

US President Donald Trump has called on nations to help secure the vital shipping route by sending warships. Yet even countries with longstanding security ties to Washington have shown little enthusiasm to join the proposed multinational escort coalition in the Strait of Hormuz.

Instead, several of America's Asian and European allies including those from NATO have rebuffed the appeal and refused to become involved in a crisis they didn't create, exposing rifts within the US-led alliance system.

For the US, the economic consequences of this energy shock are far less than those faced by much of the rest of the world. Over the past decade, the "shale revolution" has transformed the US into one of the world's largest oil and liquefied natural gas (LNG) producers and exporters. Higher global energy prices are actually helping the American energy sector, boosting the revenues of oil and LNG producers and exporters.

While the US remains largely insulated as a net energy exporter, many of its closest partners depend exceedingly on imported oil and gas. Japan and the Republic of Korea import about 95% and 70% of their crude, respectively, from the Middle East, much of which is shipped through the Strait of Hormuz. Even short-term disruptions in Gulf shipping routes can quickly ripple through their manufacturing supply chains.

The recent spike in oil prices could add inflationary pressure across these energy-dependent industrial economies, raising input costs for petrochemicals and other energy-intensive sectors.

The economic impact is significant for the EU too, a major net energy importer getting 57% of its total energy needs from abroad. The bloc relies heavily on seaborne oil shipments, particularly diesel and jet fuel from the Middle East and the Strait of Hormuz, for fertilizers. With shipments at a near halt, European countries are scrambling to subsidize energy costs and shield the economy from one of the deepest energy crises ever.

For European economies still recovering from the energy shock triggered by the Russia-Ukraine conflict, a renewed surge in oil prices and lack of fertilizers could mean stagflation and food deprivation across the continent. A sustained interruption would tighten supply, push up energy costs higher and further complicate Europe's economic recovery at a time when growth remains fragile.

Australia, another key US partner in the Asia-Pacific, is also exposed to the spillover effects of the Iran conflict. While it is one of the world's largest exporters of LNG, Australia has just two operating refineries and gets roughly 80% of its refined petroleum products from overseas.

This structural dependence leaves it vulnerable to swings in international oil prices and supply chain bottlenecks. As energy costs climb, transport and logistics expenses rise in tandem, feeding into broader price increases and trade imbalances. The paradox reveals that even US energy-exporting allies are not immune to the wider economic repercussions of instability in the Gulf.

Washington bears considerable responsibility for the crisis. By launching a military campaign against Iran in the midst of nuclear negotiations, it undermined the prospects of a diplomatic solution, destabilized the entire Middle East and disrupted energy flows – creating an energy crisis that may benefit segments of its domestic energy sector but betrays allies by imposing significant economic costs on them through inflation, higher energy costs and trade shocks.

In effect, the US has weaponized global energy markets, turning its military leverage into economic advantage for itself while its strikes on Iran have ignited a supply squeeze that is reverberating across the global economy, leaving allies exposed.

Ultimately, America's strategic gain comes at the expense of the stability and prosperity of its partners.

*My article first appeared at CGTN

Tokyo's military ambitions collide with US priorities

By: Azhar Azam

Japanese Prime Minister Sanae Takaichi's first official visit to the United States to reaffirm "unwavering solidarity" between Tokyo and Washington comes as Japan uses the regional environment to justify expanding its military position.

Since assuming office, Takaichi has adopted a strikingly hawkish tone toward China, frequently portraying Beijing as the central challenge to Japan's national security.

In a recent policy statement, she argued that her country was facing the most "severe and complex" security environment of the post-war era, citing China's military modernization and regional activities. Such rhetoric has become an essential component of her efforts to rally political support for sweeping changes to Japan's security policy.

Takaichi continues to rehash this confrontational message. Speaking at the National Defense Academy of Japan, she declared that Japan must strengthen its defense capabilities "without excluding any option." The remarks suggest Tokyo's intent to move beyond a strictly defensive posture and deepen concerns over its gradual abandonment of its pacifist posture in favor of a more assertive – even offensive – military identity.

Japan's militarization is accelerating this drift. Tokyo's defense reforms including raising military spending to 2% of GDP and coming under the US nuclear umbrella – Washington's pledge to employ its nuclear arsenal to defend allies like NATO members and Japan against nuclear or major conventional attacks – reflect a dramatic expansion of its security ambitions.

These measures further mark a clear departure from Japan's longstanding commitment to its three non-nuclear principles: not possessing, not producing and not allowing nuclear weapons to enter Japanese territory or its territorial waters.

Last week, Japan's Defense Minister Shinjiro Koizumi confirmed that Tokyo had begun receiving US-made Tomahawk and Norwegian Joint Strike Missiles. The acquisition of these offensive weapons is a significant escalation in Japan's military approach. While successive governments have interpreted Article 9 of the Constitution to allow self-defense, acquiring long-range strike capabilities is a clear shift toward a more assertive military role, stretching the limits of Japan's pacifist framework.

These actions have sparked an outrage in Japan's civil society and among opposition political leaders, many of whom view the missile acquisitions as a violation of Article 9. The controversy illustrates how far Japan has moved from its peaceful doctrine.

Tokyo frames this hardline stance as a response to growing regional threats. In practice, the narrative has become a familiar tool for pushing through military expansion and gradually dismantling the restraints of its post-war security guideline.

Since becoming prime minister, Takaichi has been emphasizing the centrality of the US-Japan alliance to secure US President Donald Trump's support for her contentious security agenda. She has repeatedly signaled goodwill toward him, highly accommodating his terms, highlighting cooperation on trade, defense spending and strategic alignment with Washington.

Yet this overture ignores the underlying feature of American foreign policy. For Washington, alliances are rarely altruistic. The Trump administration – and Washington more broadly – tend to treat partners through the lens of national interest and transactional pragmatism. The "America First" logic is explicit: Alliances are valued only if they advance US objectives.

From the US perspective, the Tokyo-Washington alliance is not an unconditional security guarantee but an instrument of geopolitical convenience. Within the US Indo-Pacific strategy, Japan functions as a strategic piece on the regional chessboard rather than an equal partner or staunch ally – valuable to contain China, yet expendable when American interests demand flexibility.

Senior American officials have already clarified that Washington's policy toward China and Japan will not be driven by an either-or choice. Recently, US Secretary of State Marco Rubio emphasized that the US intends to maintain both close ties with Tokyo and constructive engagement with Beijing, calling tensions between the two countries "preexisting."

For Japanese policymakers, this statement should dispel any illusion that the US could be leveraged to pressure China. Japan's role in US strategy has inherently been and will remain contingent, dictated by American interests rather than Tokyo's security ambitions. Washington may at times seek to counterbalance Beijing's influence but it wants to maintain an extensive diplomatic and economic relationship with China.

Public opinion in the country backs this approach with many Americans supporting friendly cooperation and engagement between the world's two largest economies.

Relying on the US alliance to underwrite Japan's growing military assertiveness therefore is a risky strategy. Historically, Washington-Tokyo relations have proven transactional. Washington has demonstrated that it prioritizes its own economic and strategic interests. Trade negotiations, for example, have seen Japan accept tariffs and commit to large investment packages in the US.

Even US intelligence has flagged Takaichi's controversial remarks on Taiwan – that a Taiwan contingency would constitute an "existential crisis" for Japan – as a "significant shift" from a sitting Japanese leader.

By leaning on US support to justify its military expansion, Japan risks trading decades of restraint for a security promise that may never hold. Caught between Trump's demand to provide escort ships in the Strait of Hormuz and widespread domestic opposition to US-Israel actions in Iran, Tokyo's strategy will threaten its own pacifist principles, fracture public consensus and inflame regional tensions.

And whenever American priorities shift, it will leave the nation exposed, delivering neither security nor stability.

*My article first appeared at CGTN

Boao Forum puts cooperation at the heart of Asia's future

By: Azhar Azam

Lead: Leaders and policymakers at the Boao Forum for Asia's 25th annual conference delivered a clear message: Asia's path to stability and growth depends on partnership, shared innovation and inclusive development.

Over the years, the Boao Forum for Asia (BFA) has transformed into a high-level dialogue platform for governments, businesses, experts and scholars to jointly discuss the most pressing issues in Asia and the world.

Held annually in Boao, south China's Hainan province, this year's forum brought together participants to address shared challenges and promote economic growth across Asia.

Marking its 25th anniversary this year, the BFA reaffirmed its commitment to deepening regional economic integration and promoting common development among Asian countries. The Asian Economic Outlook and Integration Progress Annual Report 2026, released during the forum, highlighted the resilience and vast economic potential of the continent. Asia's economy is forecast to expand by 4.5%, with its share of global GDP approaching half on a purchasing power parity basis, the report said, pointing to the continent's growing influence worldwide.

Equally significant is the strengthening of intra-regional trade dependence, which edged up from 56.3% in 2023 to 57.2% in 2024. This increase reflects a gradual shift toward deeper regional integration as major economies orient their partnerships within Asia itself. China and the Association of Southeast Asian Nations (ASEAN) have been identified as "twin anchors of stability," helping sustain economic momentum and reinforce confidence across the region.

The region, particularly China and ASEAN, continues to be the world's premier destination for foreign direct investment, underpinned by economic resilience, an expanding consumer market and growing appeal for global investors. The region is also emerging as a global hub for artificial intelligence. Through advances in AI research, large-scale deployment and industrial application, China — through cooperative mechanisms like the BFA — is playing a central role in Asia's economic and technological transformation.

Despite headwinds such as unilateralism, protectionism and "de-risking," China has drawn global attention for its high-quality development. Amid efforts to downplay the event's significance, participants at the annual conference said Beijing had injected invaluable stability into global supply chains and that the country's edge in technology would drive exports of advanced machinery.

China's openness has fostered a strong and dynamic innovation ecosystem. Over the years, the East Asian nation has evolved from the "world's factory" into a global hub for research, development and technological advancement where multinational companies see value in locating their innovation centers. Beyond gaining access to China's vast consumer market, global enterprises recognize China’s pivotal driving role in global industrial and innovation development. They actively leverage the country's unparalleled talent pool, mature integrated supply chains and policy support that encourages technological collaboration and synchronized innovation strategies.

This openness has also created new corridors of cooperation, particularly with countries of the Global South. For multinationals, China not only offers opportunities to broaden their business footprint but also to grow alongside the country. Beyond collaboration with pharmaceutical firms, Beijing has extensively engaged global enterprises from diverse industries and strengthened comprehensive science and technology cooperation with developing nations.

By leveraging China's robust research infrastructure, advanced technology base and regulatory support, global companies can innovate, grow and contribute to shared development across the region.

International leaders are increasingly highlighting China's critical role in building an open, rules-based multilateral trading system and promoting innovation-led, sustainable development amid widening global fragmentation. Singapore’s Prime Minister Lawrence Wong, speaking at the forum, said Beijing has a key role to play in supporting Asia's prosperity and stability. He cited the Hainan Free Trade Port as a "concrete example" of China's commitment to openness and its role in shaping the region's economic architecture.

Praising China's contribution to global development — including through the Belt and Road Initiative — and placing the country at the forefront of emerging areas such as digital and green technologies, Wong called on Beijing to lead the next wave of technological change. As the world explores new areas of cooperation, the BFA has stood out as a leading platform to help maintain the region's competitiveness, advance green growth and create opportunities for mutual development.

This year's forum took on added significance following China's adoption of the Five-Year Plan (2026-2030), which prioritizes high-quality development, AI, scientific and technological innovation and domestic consumption. As Beijing advances its long-term strategy and pushes into emerging technologies, the BFA served as a key venue for leaders, investors and policymakers to understand China's development priorities. Many see opportunities to leverage its strengths in renewable energy and green technologies to accelerate their own transitions.

Against a backdrop of intensifying tariff disputes and a deepening security crisis in the Middle East, this year's BFA emerged as a platform to advocate for peace, stability and development. Speaking at the forum, China's top legislator Zhao Leji emphasized that President Xi Jinping’s vision and initiatives—including building a community with a shared future for humanity and the four global initiatives—have provided a clear direction for the world amid profound global changes. He reaffirmed Beijing's commitment to openness, improving the business environment and promoting common development. He also urged regional nations to jointly work toward an "Asian security model" that emphasizes dialogue and consultation to resolve conflicts. In doing so, the forum reinforced its role as a venue for Asian leaders and global stakeholders to discuss pathways to maintaining stability and sustaining economic growth.

Asia is navigating an unprecedented phase marked by intense economic and security challenges. At such a critical juncture, the BFA proved more important than ever. By bringing together policymakers, industry leaders and scholars, the forum facilitated meaningful exchanges and helped steer the region's collective response to emerging risks and opportunities. China's sustained commitment to openness, innovation and regional cooperation — and its promotion of peace and stability — provides a solid foundation for deeper collaboration to safeguard regional economies and security.

Ultimately, the BFA delivered a compelling reminder: sustainable growth and stability in the region depend not on competition, rivalry or fragmentation but on strengthened partnerships, shared innovation, and a renewed commitment to inclusive development and lasting peace.

*My article first appeared at "China Diplomacy in the New Era"